In an effort to establish a China-free supply chain, Korea Zinc and Lockheed Martin agreed to collaborate on an independent germanium supply chain, from mining to refined material.

As part of the memorandum of understanding (MoU), Korea Zinc aims to provide Lockheed Martin with refined germanium, sourced from the company’s zinc mining operations. In addition to sourcing primary feedstock from integrated mining activities, Korea Zinc also announced it would invest KRW140Bn (US$100M) in its Onsan smelter in Ulsan, South Korea.

The announced germanium plant will produce high-purity germanium dioxide, equivalent to approximately 10tpy Ge metal. The company aims to commence trial production in 2027, with full production expected in H1 2028.

Alternative sources of germanium for the USA are critical in a time of escalating geopolitical tensions and trade wars. According to Project Blue, China accounts for more than 70% of global refined germanium. Since the export restrictions were announced in July 2023, germanium prices have reached a 20-year high, standing at over US$2,000/kg Ge. China also flat-out restricted all germanium exports to the USA in December 2024.

While the USA has access to germanium resources from its Red Dog mine in Alaska, material concentrates are transported to Teck Resources’ Trail smelter in British Columbia, Canada. Additionally, some ex-China sources remain available, such as Umicore’s European refining facilities.

One key issue with germanium sourcing is lead time and capacity. Most facilities are only able to produce germanium on demand, and germanium units in zinc concentrates are not consistent. Therefore, supply is irregular and subject to germanium grades in zinc concentrate.

A dedicated facility for Lockheed Martin’s operations in South Korea contributes to diverted supply chains; however, due to South Korea’s elevated cost structure, germanium units may come at a premium.